Spencer’s retail reaches break-even for first half of current fiscal – The Financial Express

Spencer’s Retail, the multi-format retailer from the RP-Sanjiv Goenka Group, has reached break-even at the profit before tax (PBT) level for the first half of the current fiscal.

“Spencer’s for the first six months actually got to a PBT break-even… this is a very strong step forward,” group chairman Sanjiv Goenka told shareholders during the 40th annual general meeting of CESC, the group’s flagship, on Friday. “Spencer’s is already almost there (to become profitable),” Goenka replied to a question of one of the shareholders.

The company, which is on an expansion spree, is currently focusing on increasing the store count in existing clusters in east, south and north of India. In this effort, Spencer’s opened one store in every 10 days and thereby augmented the retail network of the chain. Its store count now reaches over 140 across the country.

On the group’s newly-launched FMCG business, Goenka said, “Our FMCG launch is being absolutely spectacular. The products have been very strongly received. Distribution reach has become very strong. Long way to go, but it is a very good beginning.” This business will take “sometime” to become profitable, he said.
“It is a peculiar situation. The more you grow, at one stage, your losses increase and after a certain point of time, it starts getting into profit. I think the inflection point (break-even) will come somewhere around March 2020 or thereabout and till then, there will be losses at that company level (for FMCG business),” Goenka said.

The group, which has recently unveiled its newest snack product range ‘Karare’ under the brand ‘Too Yumm!’, entered the FMCG space last year. It brought the E-Vita brand under its portfolio by acquiring a controlling stake of 70% in packaged foods company Apricot Foods in 2017. Notably, after the proposed demerger of CESC, the group’s FMCG business will be under RP-SG Ventures, which will also house IT and Quest Mall.

The board of CESC had approved a restructuring plan to demerge its large businesses into four separate entities – power generation, power distribution, retail and other businesses.

According to its latest annual report, the company obtained the necessary clearances from Sebi and the stock exchanges for the proposed demerger.

After that, a draft restructuring scheme was submitted with the National Company Law Tribunal, Kolkata bench in September, 2017.

In March 2018, the NCLT passed an order, sanctioning the scheme with the direction that the part of the scheme providing for demerger of CESC’s generation undertaking shall be effective upon obtaining approval of the West Bengal Electricity Regulatory Commission (WBERC) to the power purchase agreement between CESC and the generation undertaking that is proposed to be demerged.

“Your company made an application in April, 2018, seeking WBERC’s approval. At the time of writing this letter the approval is awaited,” Goenka said in his letter to shareholders in the annual report. Asked about the time line for demerged entities to be listed, the chairman on Friday said it was pending with the stock exchanges.

The group will set up electric vehicles charging stations, and the first one is “ready”.